Economic Distress Index
census
acs
economic distress
counties
A county-level measure of economic distress based on seven indicators.
Methodology
The index combines seven indicators into a single, comparative measure of economic well-being. The index is constructed from the U.S. Census Bureau’s American Community Survey (ACS) 5-Year Estimates and County Business Patterns (CBP) datasets. Figure 1 contains the seven indicators along with their descriptions and sources.
These seven indicators are individually normalized across 105 counties on a scale of 0 to 100, where 100 represents the most distressed county and 0 represents the least distressed county. The individual indicators are normalized using the following formula:
\[\text{Index Indicator}_{ij} = \frac{X_{ij}-\text{min}_{(\text{of } 105)}\{X_i\}}{\text{max}_{(\text{of } 105)}\{X_i\}-\text{min}_{(\text{of } 105)}\{X_i\}} \times 100, \]
where 𝑋𝑖𝑗 is the value of indicator 𝑖 for county 𝑗.
In most cases, higher values represent greater distress; however, for the median income ratio, change in employment, and change in establishments, lower values indicate greater distress. Therefore, normalization requires a slightly different formula:
\[\text{Index Indicator}_{ij} = \frac{\text{max}_{(\text{of } 105)}\{X_i\}-X_{ij}}{\text{max}_{(\text{of } 105)}\{X_i\}-\text{min}_{(\text{of } 105)}\{X_i\}} \times 100. \]
The final index value results from taking the geometric mean of the seven indicators. To handle the zeros, one is added to each normalized indicator; therefore, one is then subtracted from the calculated mean.